The year 2022 is a difficult year, while the recovery from Covid-19 has just begun, comes another big problem of the Ukraine war -Russia. It is no longer a question of invasion between the two countries, but a question of hitting economies around the world. Russia's full-scale invasion of Ukraine began on February 24, 2022 and added to growing concerns of a sharp global economic slowdown, rising global inflation and debt, followed by rising poverty levels, according to the World Bank in the Recent Economic Updates. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essay There are still many studies on the economic consequences of the war between Ukraine and Russia. However, Peterson K. Ozili, in an article published in SSRN Electronic Journal (May 2022), clearly mentioned that war has a direct impact on the global economy. The invasion of Ukraine and Russia impacted the global economy by disrupting the global supply chain. Prices of energy, raw materials and food are skyrocketing, leading to a drastic rise in global inflation. Malaysia, located more than 5,000 miles or more than 8,200 kilometers from Ukraine, was also affected. The logistics company I currently work with is a global logistics provider brand, born in Japan. The main business in Malaysia includes air freight consolidation, trucking, ocean freight, warehousing and distribution services. When it comes to international freight and transportation, we cannot escape their fate, which has been affected. Due to the war, the price of fuel skyrocketed above $100 per barrel. At the beginning of March, Brent crude even reached up to $130 per barrel. As the price of fuel increases, fuel costs for international freights increase simultaneously. The cost of operation is becoming higher than ever and the sales and marketing team has the challenge of selling at a higher freight rate. If it sells at the old freight rate, the trade agreements will be loss-making. Since the outbreak of the Ukrainian–Russian War, there have been a series of restrictions on transportation across Russia and Ukraine. Russian airspace is closed to 36 countries. In response to Russia's invasion of Ukraine, several countries took steps to restrict Russian Airlines' operations, worsening the shortage of cargo space on the European route. At the same time, parts of the Black Sea and the Sea of ​​​​Azov are impassable and dangerous for ships. There have been reports of missile attacks on ships and lane closures for commercial shipping. Although I am responsible for the company's human resources, I have the chance to share how our team overcomes these challenges through the words of our Chief Commercial Officer. , Miss Chong Chai Hun who worked closely with the operational team and the company's counterpart. She revealed that the war had an immediate impact and a long-term impact on our operations and activities in Malaysia. A brief business impact analysis is in place, led by the Air Cargo Product Manager. The business impact analysis measures the impact of such a disruption. From there, we attempt to identify recovery priorities, required resources and ministry personnel to implement and support activation of the business continuity plan. The business impact analysis revealed that although thepercentage of turnover coming from the European route represents approximately 10% of the total turnover of our Malaysia offices, the impact is present in terms of loss of turnover, delay in delivery and increased costs (example: staff overtime, higher fuel surcharge, terminal fees), potential customer dissatisfaction and delay of the commercial expansion plan for the European route. Just after the start of the war, our company was unable to send shipments to European areas and services were subsequently suspended, particularly for air freight. This situation has continued for almost two to three weeks. . The usual routes of all planes flying to Europe from Asia will pass through Ukrainian airspace. Due to the war, many carriers like ANA and FEDEX stop flying to Europe, while SQ Airlines cancels the flight to Denmark when the initial phase of the war started. Some carriers are still flying but are reducing their trips to European countries. Subsequently, carrier capacity to Europe decreases. With the limited supply available, the freight rate increases significantly. Revenue is therefore significantly affected for the Europe business sector. The turnover of the Europe channel represents on average 10% of the total turnover per month. Since the invasion of Ukraine and Russia in early 2022, turnover represented less than 7.5% of total turnover. At the same time, the cargo operations division was affected. Some customers have decided to hold back shipments for further observation of the unpredictable invasion. Some requests for other delivery alternatives. Shipments en route will need to be rerouted or transited or even change modes of transport to avoid the usual route to Europe. Additionally, the operation engaged with carriers with “blocked space agreements” (BSA). The inability to sell the used blocked space means that a fixed cost will have to be absorbed by the company. Imagine, no delivery, but you still have to bear the operational costs. Let's take our KLIA operation as an example, we have committed around 40 tonnes per month for the Europe route for the BSA. Nobody knows when the war will end. From a long-term perspective, the war caused uncertainty in business. Skyrocketing fuel prices have directly affected operating costs. Sales staff struggled to sell cargo space with the high price of fracked fuel. The existing sales contract was no longer applicable. If applied blindly to the existing agreed rate, trade agreements will affect the profit margin and, even worse, result in loss of figures. The war also affected our Malaysia offices' plan to expand the European route (air freight) during these three to six months. . Shippers should observe and evaluate the potential risk before deciding to move shipments. The risks to be considered are the potential risk of cargo delay, cargo damage during the delivery process, risk of cargo missing due to transit and rescheduling of cargo at transit ports, etc., all having to bear the high transport costs. It is widely expected that the invasion will take longer to resolve and that international trade with Europe will slow down. Dealing with this sudden tragedy is not an individual departmental issue. The ministry cannot act in SILO to remedy the situation. Among the three key functions of the organization, sales, marketing and operations work closelycollaboration to address challenges, to ensure the recovery of activity as quickly as possible, in accordance with the company's continuous business planning (BCP). The goal of continuous business planning is to minimize disruption and mitigate risks to operations and ensure our business remains viable during the outbreak of unforeseen circumstances. The emergency process is activated as a precautionary measure, to mitigate the risks of loss of customer confidence and loss of business. Between the two, crisis communication is crucial and must be implemented immediately, quickly and accurately. In such an emergency, the customer will want to know how they will be impacted, what is the delivery status of their cargo, etc. We are proud to have overcome the disruption with minimal impact on our Malaysia offices. At the beginning of the incident, all shipments to Europe were delayed in the delivery process, whether it was local delivery to export, delay in the delivery process. fry freight to Europe, or detained at the midway transit point on the route to Europe. The freight operations team and customer service team will need to obtain first-hand information on suspension of delivery by the carrier, information on delivery delays, real-time information regarding disruptions in counterparty operations , and inform customers (senders and recipients) of the progress of the delivery of the goods. as early and as quickly as possible. We clearly understand that the cost associated with service outages is much higher than an ordinary citizen can expect. Not being responsive to customers will lead to loss of trust and customers not coming back in the future. Therefore, information is shared with all stakeholders, both internal and external, using Global I-net and escalating customer advice by publishing it on the KWE Group website, via emails, faxes and phone calls. While being less and less numerous. carriers flying to Europe, the operations team, despite no movement of shipments, began looking for alternative carriers that were still flying. Of course, even though we are responsive, other competitors act the same way, vying to secure the limited space to move cargo. The freight rate has increased and facing the price hike, sales and marketing will have to deal with the customer to update the problem and the increase in transportation costs and try to get the customer to purchase with the new quote to move goods to Europe. Everything must be done quickly. If we delay in acting, we will lose our chances of securing the limited space available for goods transported to Europe with the competitor. The situation is gradually improving as airlines and carriers offer new detour routes, new drop-off points and avoid crossing borders. Airspaces of Russia and Ukraine. The new routes to Europe are further than the usual route. Shipments from Malaysia to Europe fly east to Japan and the transit point in Anchorage, Alaska, then to Europe avoiding Russia, or west through the airspace from Turkey, a route further south, towards Europe avoiding Ukraine. A clear picture according to Annex 2. Both new routes will take longer distance and flight time. This costs more because carriers are subject to fuel surcharges. It is more economical to travel using the western route. Once again, our operations.